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Hurricane and Tropical Storm Harvey will impact final U.S. long grain rice production figures, but too early for me to speculate.

Economic crosscurrents: The bullish bias remains in the U.S. long grain rice market, even as global economic crosscurrents related to currencies, bonds, equities and commodities are rebalancing markets.

Domestic and global rice fundamentals coupled with these policy intervention activities have benefitted the U.S. long grain rice sector.

Recession avoided: The U.S. and global economic, market, policy and regulatory events this year have unfolded in a manner that has allowed the U.S. to not only avoid a near-term recession, but through policy intervention pushed a potential U.S. recession and global economic slowdown possibly two-plus years into the future. Given fundamentals, today’s domestic and global rice market would have not fared well with a significant global deceleration in economic activity.

China’s credit crisis has weighed heavy on global markets in 2017, especially commodity markets, but the crisis now appears to be manageable given aggressive Chinese and global financial engineering. China’s ability to remain economically stable in 2017 is a major accomplishment of the top Chinese leadership and the Bank of China.

Dollar weakness: Many of the world’s currencies remain more bullish than bearish, allowing the U.S. and Chinese currencies room to weaken and re-energize their respective economies, which is a plus for U.S. long grain rice exports.

Bond Market: The U.S. 10-Year Treasury Yield is presently trading in a range of 2.1 to 2.4, which given domestic and global economic fundamentals is friendly to domestic and global economic growth, and many commodity markets including rice.

Equities: U.S. and global equity markets have some potential price consolidation or weakness over the next one to two months. The question becomes what’s the near-term impact on cotton, grain and rice markets? We simply must cautiously work our way through the next couple of months.

Thus, the domestic and global rice fundamentals, including unfolding events associated with Hurricane and Tropical Storm Harvey, coupled with an array of domestic and global government and Central Bank intervention activities, continue to give rice a bullish bias to date.

2017/18 World Rice Supply and Demand

World Rice-Cliff Note Version

2017/18 world rice acreage at 161.8 million hectares is slightly below last month’s 161.9, but still the highest on record

World rice yield at 4.4 metric tons per hectare is below 2016/17 period’s 4.5, but consistent with previous six periods

World rice rough production at 719.9 million metric tons is 1.8 million metric tons below 2016/17 and the 2nd highest on record

World rice milled production is the 2nd highest on record at 482.6 million metric tons

World trade at 43.9 million metric tons is the 3nd highest on record, which, in-part, reflects global uncertainties

World rice total use at 479.1 million metric tons is the 2nd highest on record only exceeded by the previous marketing period’s 480.3 million tons

World rice ending stocks continue to build at 122.9 million metric tons, which is the highest since 2001/02

USDA Long Grain Rice Supply and Demand -- Cliff Note Version:

The long grain rice season-average farm price range is forecast at $11.50 - $12.50 per cwt or $5.18 - $5.63 per bushel